NEW YORK (TheStreet) -- Shares of The Blackstone Group L.P. (BX) are down -3.34% to $28.10 on Wednesday following a report that private equity firms are facing possible sanctions after the SEC found a number of firms have paid illegal fees or committed rule violations.
The SEC began examining the $3.5 trillion private equity industry two years ago, Bloomberg reported.
"There will be several significant enforcement actions, enough to where the message will be pounded home loud and clear as to what is acceptable and what is not," said Jay Gould, the head of investment funds team at the Pillsbury Winthrop Shaw Pittman LLP law firm, Bloomberg reported.
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Gould said remarks made by the Drew Bowden, the head of the SEC exam program, forecast "significant changes" in how the industry will continue operating.
TheStreet Ratings team rates BLACKSTONE GROUP LP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BLACKSTONE GROUP LP (BX) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 22.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 43.46% is the gross profit margin for BLACKSTONE GROUP LP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.39% is above that of the industry average.
- Powered by its strong earnings growth of 51.72% and other important driving factors, this stock has surged by 44.57% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- BLACKSTONE GROUP LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BLACKSTONE GROUP LP increased its bottom line by earning $1.98 versus $0.40 in the prior year. This year, the market expects an improvement in earnings ($3.16 versus $1.98).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 58.4% when compared to the same quarter one year prior, rising from $167.64 million to $265.62 million.
- You can view the full analysis from the report here: BX Ratings Report